Thomas Cook shares plunge by a THIRD: World’s oldest travel company hammered by heatwave in Europe that deterred lucrative last-minute bookings
- Operator cut its full-year profit forecast for the second time in two months
- Shares in the company were down 31 per cent at 0824 GMT, at six year lows
- Latest downgrade on took its shares down 70 per cent in the past 12 months
Thomas Cook lost a third of its value on Tuesday after the holiday operator cut its full-year profit forecast for the second time in two months and suspended its dividend following the hot British summer.
The oldest travel company in the world, Thomas Cook has been hammered in recent months by the heatwave that gripped northern Europe this year, deterring holiday makers from booking lucrative last minute deals.
Shares in the company were down 31 per cent at 0824 GMT, at six year lows. Shares in rival TUI Group fell eight per cent.
Thomas Cook lost a third of its value on Tuesday after the holiday operator cut its full-year profit forecast for the second time in two months and suspended its dividend following the hot British summer
Thomas Cook warned in July and September that the weather had hit demand in the most profitable part of the summer season and hurt winter trading, and the latest downgrade on Tuesday took its shares down 70 per cent in the past 12 months.
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‘After a good start to the year, we experienced a larger-than-anticipated decline in gross margin following the prolonged period of hot weather in our key summer trading period,’ Chief Executive Peter Fankhauser said.
Bringing forward its results by two days, the company on Tuesday said underlying operating profit had fallen to £250 million ($320 million) for the year to the end of September, down £58 million on the previous year.
In September it had predicted an operating figure of £280 million.
Thomas Cook warned in July and September that the weather had hit demand in the most profitable part of the summer season and hurt winter trading, and the latest downgrade on Tuesday took its shares down 70 per cent in the past 12 months
Sunseekers in July enjoying the scorching weather in Brighton
Thomas Cook makes all its profit in the summer when its customers in northern Europe, including Britain, Germany and Scandinavia go on holiday, mainly to warmer destinations in southern Europe such as Spain, Turkey and Greece.
Part of the hit came from £28 million worth of legacy and non-recurring charges, due to transformation and disruption costs, and unpaid historic hotel bills.
‘The UK was particularly hard hit with very high levels of promotional activity coming on top of an already competitive market for holidays to Spain,’ the company said.
Thomas Cook recently came under fire, meanwhile, from animal rights campaigners for offering rooms in a Chinese hotel that has captive dolphins and beluga whales displayed at on-site attractions.
The dolphins have been sourced from a ‘drive fishing’ hunt in Japan described by a leading marine mammal scientist based in Washington DC – Dr Naomi Rose – as ‘horrific’ and ‘wildly cruel’. The same scientist described dolphin and beluga captivity as ‘fundamentally inhumane’.
The UK-based Dolphin Freedom pressure group has been calling upon Thomas Cook to cut its ties with the hotel – the Atlantis Sanya in Hainan province. It argues that the deal with this hotel renders the travel company’s recently trumpeted animal welfare policy regarding marine attractions, in which it announced a move away from them, as disingenuous.
Its campaign has included demonstrations outside Thomas Cook offices and the circulating of a #dropthedolphins hashtag on Twitter.
Thomas Cook said: ‘We are the first major holiday company to take action based upon a programme of independent audits, and the first to announce that we are going to stop selling excursions which keep Orcas in captivity. When we introduced our policy, we recognised that customer expectations were changing when it comes to animal attractions and we are committed to maintaining an animal welfare policy which is in line with our customers’ expectations of us.’
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